OWATONNA — The Owatonna City Council has approved the proposed 2020 budget and tax levy with the final versions to be voted on in December.
During the regular city council meeting on Tuesday, council members adopted the proposed tax levy for the year 2020 that they believe follows the increase in growth of the city’s tax base, which is estimated at 5.28% as provided by Steele County. The proposed levy includes an increase of 4.5%, though there was brief talk of reducing the levy increase to 4% by the end of the year.
Reducing the levy increase to 4% would result in a reduction of $65,800 to the current proposed 2020 budget of $35,398,379. The city relies on property taxes for approximately 50% of the total Governmental Funds revenue, supporting such functions as general government, public safety, public works, and culture and recreation.
By keeping the levy increase beneath the tax base increase, which was achieved the previous year, the City of Owatonna has been able to keep the rise of property taxes to a minimum. During an early part of Tuesday’s meeting, council member Kevin Raney stated that the intention was the city council was to keep property taxes from rising — and potentially even decreasing — so that “other entities” who may need a bigger increase can be taken care of.
According to the 2020 proposed budget presentation put together by the city administrator and the finance department, the city’s goal is to provide exceptional services to its citizens at an affordable price. With the recent development activity, the City is started to see growth in its tax capacity. The City has seen over 3%-7% increases in its tax capacity over the last three years. The current year budget includes a 4% levy increase and current and recent levy increases are related to investments in the city’s workforce, infrastructure, and technology.
Much of Owatonna’s growth is seen in the commercial and industrial sector. Daikin is in the process of completing an expansion of 15,000-square-fett which will include hiring an additional 50 employees. Start-up company Rise Modular is acquiring the former Chart Building and, after remodeling the space, will employ between 80 to 100 people. A major distribution center for Costco is proceeding through the development process and new commercial space is being constructed for professional offices, retail, and restaurant space.
Another positive development for Owatonna is the long-awaited funding of the Highway 14 expansion to four lanes from Owatonna to Dodge Center which will elevate safety with the movement of freight and people, further supporting continued economic growth.
The total proposed levy includes the city levy of $13,381,106 and $185,000 each for the EDA and HRA levies.
“Both HRA and EDA were pretty steady at $120,000 for quite a while,” stated council member Nate Dotson, confirming that both entities were at $175,000 last year. “I think they both do good work but this is an area where they’ve gone up fairly significantly recently so I’d like us to keep an eye on that.”
The final levy amount and budget will be presented on Dec. 3 at 6 p.m.